IAS 7 para 14, IAS 16 para 68A, purchase and sale of rental assets treated as operating cash flow and sales as revenue

Atlas Copco AB – Annual report – 31 December 2021

Industry: manufacturing

1. Significant accounting principles, critical accounting estimates and judgements (extract)


Revenue recognition (extract)

Specialty rental

Income from specialty rental is recognized on a straight-line basis over the rental period. The specialty rental business is considered to be a service as this includes a complete solution to the customers to fulfill the customer needs. Sale of equipment from the specialty rental business is recognized as revenue when the control of the asset has been transferred to the buyer. Indicators of transfer of control is explained under “Goods sold” see page 66. The carrying value of the specialty rental equipment sold is recognized as cost of sales. Investments in and sales of specialty rental equipment are included in cash flows from operating activities.

Consolidated statement of cash flows (extract)